Everyone dreams of receiving a windfall. Sometimes I think it would be nice if someone just dropped $10,000 on me — I don’t even dream about $1 million. However, I’m pretty sure there aren’t any long-lost uncles waiting around to leave me any sort of inheritance. Others, though, do end up with a windfall in the form of an inheritance.

The question of what to with the money is one that everyone has to answer. After the government takes its cut, you need to decide what you are going to do with the money. If you are smart about what you do with an inheritance, you can secure your financial future. Without a solid plan, though, you could quickly find yourself worse off than before you received your inheritance.

First Things First: Get That Money Working for You Safely

The most important thing to do is to avoid making any quick decisions about what to do with your inheritance. You need to grieve properly, and you need to consider your financial situation and your options. However, the fact that you should take a little time to consider your next money move doesn’t mean that you should let your money just sit there. Put the money in a safe place that is relatively liquid.

Consider putting the money in FDIC-insured high yield savings accounts, short-term CDs or money market accounts. If you are confident about U.S. Treasuries, you can consider short-term Treasuries as well. However, many people prefer the liquidity and accessibility of high yield savings accounts[3]. Your money is safe, it is earning interest (even though the yield is low), and you have some time to get your bearings.

Ideas for Your Inheritance

Because personal finance is so, well, personal, it is vital that you consider what would be best for your situation. Consider your financial situation, and what would help you reach your goals. Here are some ideas for your inheritance:

Pay down debt: If you have debt, especially consumer debt, paying down your high interest obligations can be one of the best things you can do for your finances. Interest payments go straight into someone else’s pocket — without providing you with any real benefit beyond the ability to borrow. Get rid of your debt[4] and reform your money habits, and you will be in a better position.

Invest: The right investments can really help you grow your inheritance. You can use the money to fund your retirement account, and to make other investments. How you invest will depend on your age, health, risk tolerance and other factors. Consider your options, and choose investments that can benefit you. It is also possible to start an income portfolio with dividend stocks and bonds to help create an income stream that can keep on giving.

Education: If you would like to further your education[5], or learn a new skill to make you more marketable, the inheritance can help. You can also use your inheritance to help your children achieve their education goals. The right education can help you improve your ability to earn more.

Improve your financial safety net: Establish an emergency fund with the money, and you will be prepared for setbacks. Good fortune now doesn’t mean that you experience a reversal later. If there are gaps in your insurance, you can close them up with your inheritance money. You can also use the money to fund a HSA.

Give: It can also be helpful to give to others. Use the money to establish a charitable foundation, take some time off to volunteer, or give in some other way. If giving is important to you, make sure it’s part of your plan.

While it can be tempting to blow all the money on fun stuff, stop and think. There’s nothing wrong with treating yourself, but you want to make sure that you are on solid financial footing first.